When will new energy vehicles have exclusive insurance

  Our reporter Yu Yong and Li Chenyang

  In recent years, my country's new energy vehicle production and sales have increased significantly. Statistics from the China Association of Automobile Manufacturers show that from 2014 to 2020, my country's new energy vehicle sales have climbed from 75,000 to 1.367 million.

As an important part of the automotive aftermarket, new energy vehicle insurance has also received increasing attention from the society.

  In September 2020, the China Banking and Insurance Regulatory Commission issued the "Guiding Opinions on the Implementation of Comprehensive Auto Insurance Reforms" and proposed to support the industry to formulate model clauses for new energy vehicle insurance, accident insurance for drivers and passengers, and extended warranty insurance for motor vehicles, and explore new energy vehicles and qualified traditional Develop innovative products such as motor vehicle mileage insurance (UBI) in automobiles.

  Limited data affects pricing underwriting

  "Traditional auto insurance products cannot fully meet the risk management needs of new energy vehicles, and it is imperative to develop and formulate exclusive auto insurance clauses for new energy vehicles." Wang Xujin, director of the Insurance Research Center of Beijing Technology and Business University, said in an interview with a reporter from Economic Daily. Compared with traditional vehicles , New energy vehicles are quite different in terms of energy power, physical structure and risk characteristics.

For example, the risks of new energy vehicles are closely related to the batteries they use. Different types of batteries have different performances such as water resistance and heat resistance, and there are differences in power attenuation and depreciation. All of these will have an impact on the car insurance rate.

  The relevant person in charge of Ping An Property & Casualty said in an interview, “New energy vehicles are the future development direction. In order to better serve the owners of new energy vehicles, it is necessary to develop exclusive provisions for new energy auto insurance. The current auto insurance provisions are not designed at the time of design. Fully consider the unique risks of new energy vehicles. For example, the risks of the three-electric system and the risks caused by the use of new energy vehicles including charging, autonomous driving, OTA upgrades and other scenarios, and these aspects need to be calculated when developing new energy vehicle insurance products ".

  At the same time, there are significant differences between the maintenance of new energy vehicles and traditional fuel vehicles, and the pricing structure between the two should be different.

However, the reporter's investigation found that there is no substantial difference between the insurance policy clauses of new energy vehicles and fuel vehicles, and some clauses do not apply to new energy vehicles at all.

For example, in the insurance liability of a fuel vehicle, a very important one is the damage to the vehicle caused by water in the engine, and the insurance company shall bear the responsibility for protection.

But new energy vehicles have no engines, only electric motors and batteries.

There is no guarantee liability for motors and batteries in the insurance clause.

  The reporter's investigation found that although new energy vehicles are constantly being updated and some popular models have been iterated three or four times, the supporting exclusive auto insurance has not been launched for a long time. New energy vehicles on sale can only follow the insurance clauses of fuel vehicle insurance.

Many new energy vehicle owners confessed to reporters, “The battery cost of new energy vehicles accounts for almost half of the cost of the entire vehicle, but the liability risk caused by battery damage is not included in the vehicle damage insurance guarantee. Well, once such an accident occurs, the difficulty in determining damage and making claims will become a common problem that plagues car owners and insurance companies."

  Since the industry has demand and the market has expectations, why can't the exclusive terms for new energy vehicles be released?

"At present, new energy vehicles are affected by factors such as small overall size, rapid model iteration, short industrialization time, and incomplete manifestation of potential risks. The insurance industry has limited new energy vehicle insurance claims data, which affects new energy vehicle insurance. The calculation of pure risk premiums." The relevant person in charge of the China Banking and Insurance Regulatory Commission said.

According to data from the Traffic Management Bureau of the Ministry of Public Security, as of the end of 2020, the number of new energy vehicles nationwide was 4.92 million, accounting for 1.72% of the total number of vehicles.

  Many industry insiders said that the law of large numbers is the mathematical foundation established by the insurance industry.

According to the law of large numbers, the more dangerous units insured, the smaller the deviation of the probability of loss; conversely, the fewer dangerous units insured, the greater the deviation of the probability of loss.

Therefore, only when insurers have enough data can they predict risks more accurately and determine insurance premium rates reasonably.

Judging from the current accumulated inventory and risk data, it is still difficult to introduce exclusive insurance products for new energy vehicles in a short period of time. Only some clauses can be tested first to continuously improve the level of auto insurance protection, while also ensuring the stability of property insurance companies. Operations.

  Exclusive terms require more effort

  Compared with traditional fuel vehicles, the power sources of new energy vehicles have more detailed divisions, both pure electric and hybrid.

Hybrid vehicles have both battery systems and powertrains. The development of new energy vehicle insurance needs to take into account the risk protection of different models, which further increases the difficulty of development.

However, with the continuous accumulation of new energy vehicle risk data, the industry will gradually establish a complete model risk assessment pricing system to lay the foundation for the introduction of exclusive terms.

  Wang Xujin believes that if blockchain technology can be applied to mileage calculation, UBI auto insurance may become a new development direction for the auto insurance industry in the future.

UBI car insurance is an insurance based on the amount of usage that determines the premium. It integrates the driver’s driving habits, driving skills, vehicle information, and surrounding environment data through connected devices such as the Internet of Vehicles and smart phones to establish a multi-dimensionality of people, vehicles, and roads. Model for pricing.

  According to industry analysts, on the one hand, UBI auto insurance can reasonably reflect the driver’s insurance and risk costs, and reflect the fairness of premiums; on the other hand, it can help insurance companies to set prices reasonably, improve customer experience, and improve the timeliness of accident handling, and through price The adjustment helps to improve safe driving behavior.

  According to a research report by China Banking Insurance Information Technology Management Co., Ltd., the insurance rate of new energy vehicles among family cars is 11.7% higher than that of traditional cars, resulting in a loss ratio of 5.4% higher.

The payout ratio of new energy vehicles in government vehicles and highway passenger vehicles is significantly lower than that of traditional vehicles.

This shows that it is necessary to consider the use of vehicles in the exclusive clauses of new energy automobile insurance, and make differentiated pricing according to the use.

 Auto insurance business ushered in new growth points

  The latest statistics from the China Banking and Insurance Regulatory Commission show that since the comprehensive reform of auto insurance, the premiums of 89% of the insurance policies signed have dropped, of which 64% of the insurance policies have dropped by more than 30%.

As of the end of February, the national auto insurance comprehensive expense ratio fell by 9.39 percentage points year-on-year, and the auto insurance fee rate fell by 6.75 percentage points year-on-year.

From the perspective of the development of the property and casualty insurance industry, reforms have put pressure on short-term performance of insurance companies, superimposed on the impact of the epidemic, and made the profits of insurance companies decline.

Industry insiders predict that traditional auto insurance business needs to find a break-even point again, and if new energy auto insurance can expand in scale, it will become a new business growth point for property and casualty insurance companies.

  The reporter learned during the interview that many large domestic insurance companies, including Ping An, PICC, and CPIC, have begun to develop and design exclusive insurance for new energy vehicles, or are implementing related plans.

“Based on the accumulated historical underwriting data and claims data of new energy vehicles, we have done some special analysis in multiple dimensions compared with traditional vehicles to evaluate the risk level of new energy vehicles. At the same time, we are actively working with external partners such as OEMs to carry out targeted analyses. Research on the unique risks of the three-electric system of new energy vehicles." said the relevant person in charge of Ping An Property & Casualty.

  The China Banking and Insurance Regulatory Commission recently stated that in the next step, in accordance with the relevant requirements of the State Council’s New Energy Vehicle Industry Development Plan (2021-2035), the industry will be organized to continue to strengthen research on new energy vehicle insurance, focusing on batteries and motors that are unique to new energy vehicles. Power equipment and its derivative risks, and strive to launch exclusive demonstration products for new energy automobile insurance as soon as possible, and promote the high-quality and sustainable development of the new energy automobile industry.

  With the promotion of a series of favorable policies, the development of my country's new energy vehicle industry will further accelerate. By 2025, the sales of new energy vehicles and new vehicles will reach about 20% of the total sales of new vehicles.

This means that the current position in China's new energy vehicle market can bring first-mover advantages to future development.

  In addition, the increase in sales of new energy vehicles has also allowed automakers to see new growth points for future auto insurance business.

It is worth noting that in April 2019, Tesla, the "leading" in the field of new energy vehicle manufacturing, launched its own insurance products in California, USA, and said that it can provide insurance rates that are 20% to 30% lower than traditional insurance companies.

  At the end of 2020, Geely Holdings acquired 133 million shares of Hezhong P&C Insurance and became the second largest shareholder of Hezhong P&C Insurance.

In response to the media, Hezhong Property & Casualty Insurance stated that in the future, it will use technology to empower insurance through business innovation and model innovation, and explore digital auto insurance and exclusive brand auto insurance.

Especially in the areas of product design customization, sales scenarios, and pricing, we continue to optimize and innovate products, improve product service quality, and increase user stickiness.

This has also made the competition in the new energy vehicle insurance market increasingly fierce.

  It is foreseeable that whether it is the "old three" property insurance companies or emerging Internet property and casualty insurance companies, if they can occupy a place in the new energy vehicle market, they can bring first-mover advantages for long-term development.

From this strategic perspective, the blue ocean market of new energy auto insurance will undoubtedly become a battleground for property insurance companies.